N.Y. State budget talks may drag into third week; housing is main sticking point

Protracted negotiations over the 10-day-late New York State budget remain unsettled and are likely to spill past the end of the week, lawmakers said Wednesday, as intricate talks over housing policy present the central sticking point.

Gov. Hochul, a centrist Buffalo Democrat, and the left-leaning Democrats who control the Legislature once hoped to broker a budget agreement by the nominal April 1 deadline.

For weeks, the governor and legislators in the Assembly and Senate have been seeking an elusive housing compromise that could revive a lapsed tax break for developers and establish new protections for New York’s beleaguered tenants.

Progressive lawmakers have sought legislation that would limit landlords’ ability to push out tenants without cause, or to institute steep rent hikes. The governor has long been resistant to aspects of the progressives’ efforts.

Assembly Speaker Carl Heastie, a Bronx Democrat, declared last week that negotiators had reached “the same neighborhood” on housing. A week earlier, he told reporters: “I don’t know if we’re in the same country yet. But I think we’re at least on the same planet.”

But it’s not clear if the Legislature and the governor have reached the same room.

Sen. Brad Hoylman-Sigal, a Manhattan Democrat, suggested Wednesday that the state could be headed for a “matzo budget” — one arriving in time for Passover, which begins April 22.

The talks have been delayed, in part, by scheduling challenges posed by the Easter holiday weekend and the solar eclipse. On Wednesday, Hochul visited Washington to meet with the White House, a trip that figured to limit any immediate budget progress.

A spokesman for Hochul, Avi Small, declined Tuesday to make any predictions about when a budget deal might materialize. He said the governor was working with lawmakers to craft a budget that would make New York “more affordable, more livable and safer.”

Assemblywoman Linda Rosenthal, chairwoman of the Housing Committee, said by phone Tuesday that a housing deal could not come together without tenant protections, but that the extent of those protections remains a question mark.

“I don’t think all the puzzle pieces have been decided,” added Rosenthal, a Manhattan Democrat.

Officials from Mayor Adams’ administration have urged Albany to reach a comprehensive housing deal, as the city works to lift its lowest housing vacancy rate in more than a half century.

The Adams administration wants a new supply-boosting tax program, tenant protections, the culmination of a cap on density and the ability to legalize basement apartments, said Maria Torres-Springer, the deputy mayor for housing.

“I know that our lawmakers and our partners in Albany fully recognize what is at stake,” Torres-Springer said in an interview after a recent trip to Albany.

Andrea Stewart-Cousins, the Senate majority leader, told a news conference Tuesday that the talks have reached “the beginning of the end.”

“But the end is hard,” acknowledged Stewart-Cousins, a Westchester County Democrat. “We’ve still got work to do. Obviously.”

The Citizens Budget Commission has rapped often-tardy Albany’s knuckles over the delay. Last year, the budget was approved a full month late.

Andrew Rein, president of the commission, warned that late budgets erode public confidence in government. And he criticized a lack of transparency in the budget process.

“A little late is worth the wait, but only if the budget’s great,” he quipped. “We’re getting past a little late.”

Without a budget on the books, lawmakers have resorted to passing stopgap measures to keep the state government open.

Housing has not been the only sticking point.

The Legislature has also pushed back on a proposal from Hochul that could cut more than $1 billion from Medicaid programs in New York. Lawmakers have countered with plans to lift state Medicaid reimbursement funding.

Hochul first outlined her budget plans in January, presenting a $233 billion blueprint that avoided hot-button nonfiscal issues such as bail reform. She described her plan as fiscally responsible given “sizable deficits” projected in future years.

Lawmakers have worked to push the price tag up. Last month, the two chambers of the Legislature unveiled their own budget plans, which would lift spending to about $246 billion.

The Legislature and the governor are aligned on some issues, such as spending on the city’s migrant crisis. Both sides have supported a $2.4 billion investment for asylum seekers.

While a broader deal remains out of reach, Hochul has seemed to bend on one headline issue.

Her initial budget proposal would have significantly changed how state school funding, called Foundation Aid, is distributed.

The governor’s plan threatened to cut funding for suburban and upstate schools by ending the so-called hold harmless policy, which ensures schools receive at least as much state funding as in the prior year, regardless of enrollment declines.

Under the governor’s initial plan, about half the school districts in the state were projected to lose funding year over year.

Hochul’s school funding proposal met with strong bipartisan criticism. And last week, the governor indicated she would back off major changes, at least for this year.

But she maintained that the state’s school funding formula is anachronistic, and she pledged to reform it next year.